0:00

Thank you to those who donated during

0:02

our May fundraiser and to those who

0:04

give year round. Support is still needed

0:06

though to end our budget year on

0:08

target. So please help power this important

0:11

resource. Would you make a budget year-end

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gift at marketplace.org/donate? Hey,

0:16

how do you feel? I

0:19

mean, really, how do you

0:21

feel? The economy wants

0:23

to know. From

0:25

American public media. This

0:28

is Marketplace. In

0:38

Los Angeles, I'm Kyle Rizdell. It is

0:40

Tuesday today. This one is the 25th

0:42

of June. Good as always to have

0:45

you along, everybody. Upon

0:47

us this morning, we're the latest

0:49

numbers from the conference board on

0:51

consumer confidence down just a bit

0:53

again this month. The latest data

0:55

point in a string

0:57

of them, small business optimism, CEO

0:59

economic outlook, consumer sentiment that

1:02

have been telling us that we, the

1:04

people, maybe don't feel so great about

1:06

the economy these days. Actual headline

1:09

data notwithstanding. The

1:12

word you're looking for here, of course, and for regular listeners,

1:14

this will not be new, is

1:16

vibe session. It's been in the

1:18

ether for years now, the vibe

1:20

session has, but why?

1:24

We sent Stacy Vanek Smith deep into the vibes

1:26

to find out. Economists do

1:28

not like talking about feelings. They

1:31

didn't sign up for feelings. Economists

1:33

like talking about data. And

1:36

the data looks strong. So why

1:38

do we feel so bad? Martha

1:40

Gimbel heads the Yale Budget Lab. She

1:43

says being an economist right now is

1:45

a little like being a doctor talking

1:47

to a totally healthy patient who keeps

1:49

insisting they're sick. You're saying like your

1:51

EKG is fine. Your blood

1:53

work looks fine. The problem

1:56

is that the patient keeps

1:58

saying, no, I'm not. I'm

2:00

really not fine. I don't feel good.

2:03

Take the job market. Right now, people

2:05

are really worried about losing their jobs

2:08

a lot more than they were before the pandemic.

2:11

But the data says... You

2:13

are incredibly unlikely to be

2:16

laid off right now. About 20%

2:19

less likely than in 2019. Gimbals'

2:22

layoffs are at the lowest level they've been since

2:25

the government started tracking those numbers.

2:28

Since they started recording in 2000. It

2:31

just doesn't feel like that's true. And

2:33

yet it is. Yeah, it doesn't

2:35

feel true. The data vibe

2:37

disconnect is real. So

2:40

what is going on? Julia

2:42

Pollack is a labor economist with ZipRecruiter

2:44

and she has a few ideas, all

2:48

of which involve complicated technical terms.

2:50

The kinds economists tend to roll

2:52

out when feelings come up. Technical

2:55

term number one? Salience

2:57

bias. So

2:59

there are layoffs happening right now. And

3:02

they're happening in industries the media covers a

3:04

lot. Like media and

3:06

tech. The layoffs have grabbed

3:08

headlines and had an outsized effect

3:10

on how we see the economy. Those

3:13

layoffs feel a lot more salient to us than

3:16

the hiring boom that's been happening in healthcare. Even

3:19

though healthcare is a much bigger part of

3:21

our economy. Another reason for

3:23

the data vibe disconnect? Bad

3:26

things tend to stick with us. Which

3:28

brings us to technical term for feelings

3:30

number two? Loss aversion. It's

3:32

the tendency for the pain of

3:35

losing to be psychologically about twice

3:37

as powerful as the

3:39

pleasure of gaining. If you lost

3:41

a job in 2020, even if you

3:43

eventually got a better job, the

3:46

pain of the lost job looms

3:48

larger. The bad times haunt us. And

3:51

so do the good times. Which

3:53

brings us to technical term for

3:55

feelings number three? Reference dependence. Even

3:58

if you're better off today. overall than

4:00

you were before the pandemic, you

4:03

will tend to measure your life against

4:05

one glorious reference point. That month, back

4:07

in 2021, when you got two job

4:10

offers in a week, your credit card

4:12

balance was zero, and that dancing panda

4:14

NFT you bought was worth $50,000. And

4:18

that reference point is making it very difficult

4:20

for them to feel happy now. So

4:23

it seems like there is just no pleasing

4:25

us. Maybe economists should just write

4:27

us off as a bunch of haters and

4:30

ignore our feelings. So economists

4:32

do worry when consumer confidence falls

4:34

because they worry that it will

4:36

have real effects. Effects like people

4:39

stop buying stuff. And

4:41

as a result, businesses really will suffer and

4:43

lay off workers and that'll set off a

4:45

negative cycle. Consumer spending is about two thirds

4:47

of our economy. If people

4:50

stop buying stuff, our vibe

4:52

session will become a recession.

4:55

But in a lot of ways,

4:57

we come by this pessimism, honestly,

4:59

says Martha Gimbal, because economic data

5:01

is just different than a lived

5:03

experience. Take inflation. When I

5:05

think about prices, I say, you know, like,

5:08

look, inflation's come down from its peak, etc.

5:10

A normal person

5:13

goes to the grocery store and says, hey,

5:16

I'm paying X for milk and I

5:18

was paying much less than X two

5:20

years ago. And

5:22

both the economists and the normal people are correct.

5:25

But even by a lived experience measure,

5:28

we should probably be happier

5:30

because our wages have risen

5:32

faster than prices. Our pay

5:34

has, on average, kept pace

5:36

with groceries. So why does

5:38

our cost of milk misery

5:40

outweigh the pleasure of a

5:42

plumper paycheck? Economists always emphasize

5:44

people's utility functions. So how

5:47

they value different inputs are

5:49

their utility functions. Is that like the

5:51

economics version of feeling your feelings? Yes,

5:53

it is exactly. That is a

5:56

better way of putting feelings that

5:58

might not be about this. this moment.

6:01

Gimbal thinks a lot of the vibe session

6:03

might be because we are still working through

6:05

the traumas of the pandemic. If

6:08

you were talking about one of your

6:10

friends who had had a really traumatic

6:12

experience, you wouldn't be saying to people

6:14

like, man, Mary just can't get over

6:16

what happened three years ago. Like, why

6:18

is she so upset? Right? Because it

6:21

is no wonder that Mary's all up

6:23

in her utility functions. Her salience bias

6:25

probably has her in a loss aversion

6:27

spiral. But maybe if you

6:29

give her some time, her reference dependence

6:31

will shift and she'll feel better. And

6:34

hopefully so will all of us. And

6:37

we can get back to good vibes. And

6:39

economists can get back to talking

6:41

about data. In New

6:43

York, I'm Stacey Vanek Smith for Marketplace.

6:46

The utility functions on Wall Street today.

6:48

We're kind of all over the place.

6:50

We will have the details when we

6:52

do the numbers. A barrel

7:20

of crude oil today, the global benchmark

7:22

Brent North Sea to pick just one

7:24

variety. That barrel would cost you $82.34.

7:29

Emphasis there not on barrel

7:31

or the kind of oil, but on the

7:34

denomination of currency in which payment

7:36

will be required. Marketplace's Sabrina Beneschor

7:38

explains why. If someone in

7:41

France wants to buy oil from Saudi

7:43

Arabia, they would usually use

7:45

dollars. Steve Kamen is a

7:47

senior fellow at the American Enterprise Institute.

7:49

If someone in Mexico wants to buy

7:51

oil from Norway, they would use dollars.

7:54

So even though these countries have their

7:56

own currencies, they still use another country's

7:59

currency, the US dollar. to buy oil

8:01

or gas most of the time. Why?

8:04

Well, history for one. The US

8:06

was originally one of the world's biggest

8:08

oil producers. We sometimes forget that. Brad

8:10

Setzer is a senior fellow at the Council

8:12

on Foreign Relations. The Rockefeller

8:15

Empire was initially a

8:17

domestic US oil empire, and

8:19

going into World War II, the

8:21

US was one of the world's biggest oil

8:24

exporters. But the real start of

8:26

dollar dominance in oil markets came after the

8:28

oil shock of the early 70s, says Gregory

8:30

Brew, analyst at Eurasia Group. Saudi

8:33

Arabia had enormous fiscal

8:35

surpluses. It was earning far more money

8:38

than it could ever hope to invest

8:40

in its own economy. So

8:42

it needed a place to park all of that money. And

8:44

the natural place to park this money was the

8:47

American market. There was not,

8:49

Brew says, some secret agreement to

8:51

do this. It just made sense.

8:53

And it still does, says AEI's

8:56

Steve Kaiman. The dollar offers the

8:58

safest, broadest, most liquid

9:00

markets. The US also is protected

9:02

by the rule of law, including

9:04

foreign investors. This logic applies

9:06

to more than just oil. Most commodities

9:08

are priced in dollars. This has perks

9:10

for the US. It creates extra demand

9:12

for US dollars the world over, pushing

9:14

up the dollar's value. But

9:16

oil does not play the big role

9:19

in this that it used to, says

9:21

CFR's Brad Setzer. Saudi Arabia these days

9:23

invests its profits mostly in Saudi Arabia.

9:25

Right now, the biggest surplus in the

9:27

global economy is actually in China. It's

9:29

not in the oil countries. And while

9:31

some countries like Russia do not use

9:33

dollars to buy oil, reports

9:36

of the dollar's imminent demise are

9:38

greatly exaggerated. In New York, I'm

9:40

Sabri Ben-Eshor for Marketplace. Dollar's

9:46

going to be around for a while, peeps. You know what else is

9:49

going to be around for a while? Our podcast.

9:51

Should you happen to miss something on the

9:53

actual radio, we've got you

9:55

covered. marketplace.org is where you can find the feed

9:57

or, of course, on the platform.

10:00

Your choice follows there. Stacey

10:20

was talking about the vibe session a minute

10:22

ago. There is, as we were

10:24

just talking about, one happening here. And

10:26

there's one happening over in the UK

10:29

too. Inflation is actually at the Bank

10:31

of England's target, that magical 2%, down

10:34

from a peak of better than 11% a couple of years ago. But

10:37

with an election around the corner over there, July

10:39

the 4th, had you not heard, all

10:42

is not well with the economic electorate.

10:44

So we did what we do and we want to know

10:46

what's on the minds of merchants and the many over there.

10:49

We called Sam Wallace. She runs a

10:51

stall selling honey in London's Borough Market.

10:53

It's called From Field and Flower. Sam,

10:56

it has been a while. It has,

10:58

it has been a while. So how

11:00

are things in Borough Market? Well,

11:03

really good actually. I

11:05

appreciate, I sound slightly surprised. The

11:07

last six months has been really busy. So

11:10

the market as a

11:12

vibe feels like it's picking up again

11:14

pre-pandemic, which I guess is the

11:16

term of reference that everybody uses nowadays, is

11:19

pre-pandemic. Well, that and vibe, so

11:21

clearly you're up to speed on

11:24

everything. You can tell I'm

11:26

very relaxed. Today. Yeah,

11:28

it's been really good. And it seems

11:30

like we're just getting more visitors. So

11:32

I don't know if they're

11:34

mainly international or local, but it just seems

11:36

to be busy again, which is wonderful. Speaking

11:39

of international, how are your relations with the

11:41

continent as it were? Because it seems to

11:43

me every time we've chatted the last number

11:45

of years, there's been a

11:48

Brexit, European trade barriers, it's harder

11:50

now thing that you have been dealing

11:52

with. And I imagine that's probably still

11:55

true. Sadly,

11:57

yes, that is still very much a

11:59

thing. In fact, I think in April

12:01

it was the latest, what

12:03

do they call it, the target operating

12:05

model for borders changed

12:08

again. That means

12:10

that our pallets go

12:12

through a slightly different system, and

12:14

that means telling customs a good

12:16

24 hours before goods land into

12:18

port what we're landing effectively and

12:20

what it is so that they

12:22

can check it. And

12:25

that requires a lot of coordination. As you

12:27

might imagine with the Haulia, with

12:29

various government systems which are

12:31

not necessarily easy for little people like us to navigate.

12:33

Well, I was just going to say, do you and

12:36

your very small staff, I mean last I heard it

12:38

was like three, maybe three and a half, whatever, do

12:40

you do that yourselves or do you outsource it? And

12:42

how much of a bottom line burden

12:44

is that to you? Well, so we

12:46

do some of it ourselves and then

12:49

we have to pay our Haulia to represent

12:51

us as a customs agent. And

12:53

that comes with fees. So they

12:55

have gone up recently. In

12:58

general, Haulia costs have gone up. Haulia

13:00

travel times have gone up. So overall

13:03

the cost is increasing all the time. If

13:05

we're trying to have a smooth logistics process

13:07

where one would try and plan one stock

13:10

to come in at a certain time and

13:13

work out your budgets and all of

13:15

that from there, it's nigh on impossible

13:17

at the moment to do that accurately.

13:19

No, I'm sure you more

13:21

than once have talked about Italian

13:24

honeys and some of the honeys that you

13:26

do get from what is now the European

13:28

Union. And I guess is

13:31

there a point at which you

13:33

would say, you know what,

13:36

chuck it, the heck with this Europe relationship,

13:38

it is too hard and we need to

13:40

further diversify our sources of honey. Oh,

13:43

it's a really tricky question. We ask

13:45

ourselves that quite a lot. I think,

13:49

and honestly, as you probably remember, our

13:51

passion is honey, but the different varieties.

13:53

So for us, it's the diversity of

13:55

flavor. So we are trying

13:57

to source as we speak honey from. the

14:00

UK basically, but looking for

14:02

those distinctive varietals, which is hard. As

14:04

I think I've told you before, we

14:06

have quite a kind of abundance

14:09

of various wildflower honeys here in the

14:11

UK that don't vary much in terms

14:13

of flavour. But I suppose the

14:15

good thing is, from our point of view,

14:17

is we found a lovely monofloral variety called

14:19

borage, which is a very light,

14:21

delicate honey. It's quite hard

14:24

to find because the bees don't necessarily make

14:26

a huge amount of it, but we've managed

14:28

to source some from Essex, and that has

14:30

been brilliant because it's far more local, frankly,

14:33

than Europe. Okay, last

14:35

thing I want to let you go because you have

14:37

things to do, I'm sure. With

14:39

the understanding that you are a honey

14:42

merchant and not a political scientist, you are the

14:44

closest thing we have to a source on the

14:46

ground over there. There's an election coming up in

14:48

the UK. And also, obviously, you

14:52

deal mostly with tourists and international visitors in

14:54

the market, but when you go to the

14:56

local corner market to get milk for your

14:58

tea, what's the move? Yes. Ooh,

15:02

I don't know. I think people are

15:04

generally quite optimistic. I mean, it's the

15:06

summer. We've got football over here, which

15:08

is massive in terms of people's spirit.

15:10

So everything kind of feels more optimistic

15:12

in the summer. And I do think

15:15

the idea that there might be a change of government

15:17

and perhaps a change of outlook, but it will take

15:19

a long time, I think, for things to truly

15:22

feel better. When I go to my corner shop,

15:24

my price of milk is much

15:26

more expensive than it used to

15:29

be. So you do notice it.

15:31

Yeah. Well, if you find

15:33

yourself in London, go by the Borough Market. The

15:35

stand or the stall is called From Field and Flower.

15:38

Ask for Sam Wallace. Tell her I sent you. Sam,

15:40

thanks a lot. It's always good to talk to you.

15:42

You too. Take care. Thanks, Kai. Talk to you soon.

16:00

Coming up. The fish

16:02

don't like to come up and bite in that. It

16:04

makes the fish lazy. Trust me,

16:06

you don't want lazy fish. First

16:08

though, let's do the numbers. Down

16:11

industrial is down 299 today. Three

16:14

quarters of 1% closed at 39,112. And

16:18

as that gained 220 points, that's

16:20

one and a quarter percent on that particular index, 17,000

16:23

to 717. The

16:25

S&P 500 picked up 21 points, 4 tenths percent, 54 and 69. Sabrina

16:30

was just telling us about how oil is bought and sold

16:32

in US dollars. So

16:34

some oil stocks. How about that? ConocoPhillips dipped

16:37

2 tenths of 1%, Chevron slayed a half

16:39

percent, Duke Energy down about 1 and 3

16:41

tenths of 1%. Home prices

16:43

hit another record high in April. That's

16:45

according to the latest S&P CoreLogic Case

16:47

Shiller Home Price Index, up 6.3% from

16:50

a year earlier. It had less than the increase

16:53

in March. Some major automakers are facing recalls on

16:55

some high profile models. Ford is recalling more than

16:57

a half a million F-150s from 2014 over a

16:59

downshifting issue. Tesla

17:03

is recalling some 11,000 of its newest

17:05

EV, the Cybertrucks. You've seen those around,

17:07

I'm sure. Tesla revved up

17:09

about 2.6% today. Ford

17:11

Motor Company decelerated. One and

17:13

a tenth. You're listening

17:16

to Marketplace.

17:20

Marketplace is brought to you by you. Yes,

17:22

the most important piece of our budget is

17:25

donations from you, our listeners. We

17:27

call the people who donate Marketplace investors

17:29

because every dollar you give comes back

17:31

to you in the form of trustworthy,

17:33

grounded reporting with a sense of humor.

17:36

So please become a Marketplace investor

17:38

today at marketplace.org/donate or just click

17:40

the link in our show notes.

17:43

This is Marketplace. I'm Kai Rizdahl.

17:46

Minimum wage is where we go

17:48

next and the disparities between what

17:50

some states say companies have to

17:52

pay and where the federal standard is. Starting

17:55

next week, minimum wage is going to get a boost in

17:57

a couple of three, four places. It goes up

17:59

to $12. for

22:00

five months. It's the exact same that my

22:02

grandfather did in the 50s. Last

22:05

year, his vessel was one of roughly 300 that

22:08

left the West Coast in search of Alba Cortuna. The

22:10

year before, there were 400. And

22:13

before the pandemic, there were more than 500. The

22:16

numbers are dwindling because Hawkins and his

22:19

competitors are having a harder time finding

22:21

fish. Last year was a really

22:23

bad catch. It was also

22:25

the warmest year worldwide on record.

22:28

You know, the temperature affects us huge.

22:30

So on years where we fished like

22:32

68 degree water and then

22:34

there's no wind and the sun's out, so

22:37

you get a thermal warming on the surface, the

22:39

fish don't like to come up and bite in

22:41

that. It makes the fish lazy. So

22:44

Hawkins tries to find cooler water using

22:46

data from Mark Hess. He's a director

22:48

of operations at a company called Ocean

22:50

Imaging, which tracks conditions in the seas.

22:53

Hess says after 35 years in

22:55

the industry, his data is sending Hawkins

22:57

and other fishermen farther afield. The

22:59

catch was mainly centered off of kind

23:01

of California, Oregon, back in the 80s

23:03

and 90s. Now the

23:05

fishery, meaning the fishing effort, all the boats,

23:08

are really fishing from Oregon all

23:10

the way up to Canada. So in

23:12

that time, the fishery has

23:15

moved north for sure. So

23:18

instead of fishing 60 to 200 miles offshore,

23:20

Scott Hawkins says he'll go up to 1,500

23:22

miles. That

23:24

trip can take a week each way. So,

23:26

you know, a lot of your profits go out to

23:29

exhaust. The Western Fishboat

23:31

Owners Association is trying to

23:33

get disaster relief for fishermen.

23:35

Based upon, in part, the

23:37

El Nino pattern that

23:39

prevented harvesting of these stocks.

23:42

Executive director Clayton Wraith is worried that

23:44

some fishermen who didn't fish last year

23:46

might never come back. Because they

23:48

need to pay their mortgage, because they need to pay their crew,

23:50

and all the rest. Scott Hawkins is

23:52

earning extra money as the captain of a dredge

23:54

boat, so he won't be heading out to sea

23:56

this month. We have a job coming up. So

23:59

this year, normally,